California Business and commercial insurance trends as I see the California Insurance Market evolve from the perspective of a independent California commercial insurance broker. Industries I have clients in include non-profits, manufacturing, commercial property owners, technology and software to name a few. I'll be discussing the trends in California Workers Compensation, Property Insurance, E&O, Errors and omissions, Directors and officers, D&O, EPLI, and other coverages
Wednesday, September 17, 2008
Are you Policy holder of a struggling Insurance Company?
If you would have asked any commercial insurance professional just three week ago, about the prospects of the worlds largest insurer failing they would have said it was impossible. As we have seen, we are now living in a world where no financial institution is immune to the fall out. As some of the largest carrier begin to show some signs that they are not immune to this market but they may not be the last as we have seen the wave of investment banking failures over the past few months continues to evolve. Watch these carriers and there subsidiaries as they have been down graded and are still posted "on watch" for further grading adjustments. What does this all mean to policy holders?
Do you hold a policy of an ailing Insurance Commercial Insurance Policy?
A companies ability to handle claims is directly related to their financial rating, if you hold a policy written with a struggling carrier or more likely one of it's companies, subsidiary insurance companies, it may make sense to have a plan in place should they continue to show signs of struggling with current masrket conditions although we have no signs that this will effect policy holders at this time. Many larger more complicated policies will take time to set up an alternative. The current "bailout" plan is only providing enough capital for these companies to restructure all profitable unit and start the sales process. Once there bread and butter insurance industry clients begin to leave, as they no doubt will, the company will continue this downward trend.
In speaking with company representatives of some of these ailing insurance companies we were told that events are unraveling quickly but that the policies that have been written were sound and would not be in jeopardy due to their current position. I believe this about as much as I believe this is the last failure we'll see in the insurance industry. We are actively discussing with our clients that have policies with these companies all of their options including which markets have already expressed interest in writing their business. Now is the time for the power of the insurance broker to kick in and proactively work to get our clients our into the best possible position to weather this storm.
Tim Pine
Arroyo Insurance Services
Orange – Los Angeles – Inland Empire
(714) 984-4023 Cell (949) 340-9664 Direct (949) 340-9663 Fax
